Why the M.I.C.E. is a Better Lens for Understanding Executive Fraud

When auditors assess fraud risk, they often start with the classic Fraud Triangle—the familiar trio of Pressure, Opportunity, and Rationalization. While it remains useful, this model has limits, especially when evaluating executive-level misconduct.

In cases like the Tom Coughlin scandal at Walmart, the Fraud Triangle doesn’t fully capture the motivations behind complex, coordinated schemes.

Enter the M.I.C.E. fraud model, a more nuanced and behaviorally rich approach to understanding what drives individuals to commit fraud at the top of the organizational chart.

What Is the M.I.C.E. Model?

The M.I.C.E. model categorizes fraud motivation into four drivers:

• Money: Financial gain or greed, including unearned compensation, bribes, or misuse of assets

• Ideology: Belief that the fraud serves a greater good or counters an unjust system

• Coercion: Pressure or manipulation from others, including superiors or toxic workplace cultures

• Ego: Entitlement, arrogance, or desire for power and status

Rather than assuming all fraud stems from financial pressure, M.I.C.E. considers psychological and organizational dynamics that often go undetected.

Why M.I.C.E. Works Better for Executive Fraud

Executives rarely steal due to immediate financial pressure. Instead, they may:

• Feel entitled to more than their compensation (Ego)

• View controls as beneath them or as hurdles to override (Ideology or Ego)

• Pressure subordinates to assist or conceal misdeeds (Coercion)

• Justify fraud as a means to maintain appearance or control (Money or Ego)

In the Tom Coughlin case, Coughlin’s behavior fits the Ego and Money drivers. He exploited company resources for personal perks, despite multi-million-dollar compensation. His assistant, Robert Hey, likely acted under Coercion—submitting false vouchers and laundering internal transactions to fulfill Coughlin’s requests.

Red Flags Through the M.I.C.E. Lens

Money

• Lavish lifestyle beyond declared compensation

• Secretive bonus arrangements or self-approval of reimbursements

Ideology

• “They owe me” attitude

• Frequent complaints about corporate policies

Coercion

• Junior employees quietly managing or hiding expenses for executives

• Fear or silence in response to questionable approvals

Ego

• Pushback on audits or oversight

• Use of intimidation or manipulation to bypass policy

What This Means for Auditors

The M.I.C.E. model encourages internal auditors to:

• Look beyond traditional controls and numbers

• Identify behavioral red flags and workplace dynamics

• Recognize how power structures and loyalty enable fraud

• Integrate AI tools to detect subtle patterns consistent with M.I.C.E. drivers (e.g., coercive transactions or entitlement-based expense abuse)

Final Thoughts

Understanding fraud requires more than checklists and reconciliations. Executive misconduct is often driven by complex motives that defy traditional models. The M.I.C.E. model adds psychological depth and organizational realism to the auditor’s toolkit. For internal auditors seeking to protect their organizations from reputational and financial damage, it’s time to move beyond the triangle and embrace the full spectrum of fraud motivation.